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Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2023

The composition of the loan portfolio, by class and underlying specific portfolio type, was as follows:


	March 31, 2023					December 31, 2022
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	132,894		34.3	%	$	131,128		33.8	%
Lease financing		4,432		1.1			4,562		1.2
Total commercial		137,326		35.4			135,690		35.0
Commercial Real Estate
Commercial mortgages		43,549		11.2			43,765		11.3
Construction and development		11,609		3.0			11,722		3.0
Total commercial real estate		55,158		14.2			55,487		14.3
Residential Mortgages
Residential mortgages		109,246		28.2			107,858		27.8
Home equity loans, first liens		7,702		2.0			7,987		2.0
Total residential mortgages		116,948		30.2			115,845		29.8
Credit Card		25,489		6.6			26,295		6.8
Other Retail
Retail leasing		5,017		1.3			5,519		1.4
Home equity and second mortgages		12,720		3.3			12,863		3.3
Revolving credit		3,720		.9			3,983		1.0
Installment		14,357		3.7			14,592		3.8
Automobile		17,131		4.4			17,939		4.6
Total other retail		52,945		13.6			54,896		14.1
Total loans	$	387,866		100.0	%	$	388,213		100.0	%

Activity in Allowance for Credit Losses by Portfolio Class

Activity in the allowance for credit losses by portfolio class was as follows:


(Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans
Balance at December 31, 2022		$2,163			$1,325			$926			$2,020			$ 970			$7,404
Add
Change in accounting principle (a)		—			—			(31	)		(27	)		(4	)		(62	)
Allowance for acquired credit losses (b)		—			127			—			—			—			127
Provision for credit losses		64			24			51			294			(6	)		427
Deduct
Loans charged-off		63			123			4			215			64			469
Less recoveries of loans charged-off		(16	)		(6	)		(5	)		(40	)		(29	)		(96	)
Net loan charge-offs (recoveries)		47			117			(1	)		175			35			373
Balance at March 31, 2023		$2,180			$1,359			$947			$2,112			$925			$7,523
Balance at December 31, 2021		$1,849			$1,123			$565			$1,673			$945			$6,155
Add
Provision for credit losses		19			(54	)		29			78			40			112
Deduct
Loans charged-off		55			1			5			158			61			280
Less recoveries of loans charged-off		(23	)		(6	)		(11	)		(46	)		(32	)		(118	)
Net loan charge-offs (recoveries)		32			(5	)		(6	)		112			29			162
Balance at March 31, 2022		$1,836			$1,074			$600			$1,639			$956			$6,105

(a)	Effective January 1, 2023, the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings.

(b)	Represents allowance for credit deteriorated and charged-off loans acquired from MUB.

Summary of Financing Receivable Credit Losses Charged-off by Portfolio Class


Three Months Ended March 31, 2023 (Dollars in Millions)	Commercial		Commercial Real Estate (a)		Residential Mortgages		Credit Card		Other Retail		Total Loans

Originated in 2023		$—		$—		$—		$—		$—		$—
Originated in 2022		6		88		—		—		10		104
Originated in 2021		4		—		—		—		11		15
Originated in 2020		4		—		—		—		6		10
Originated in 2019		5		3		1		—		7		16
Originated prior to 2019		11		32		3		—		8		54
Revolving		33		—		—		215		22		270
Total charge-offs	$	63	$	123	$	4	$	215	$	64	$	469

Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is

amended.

(a)	Primarily related to uncollectible amounts on acquired loans.

Summary of Loans by Portfolio Class, Including Delinquency Status of those that Continue to Accrue Interest and are Nonperforming

The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to accrue interest, and those that are nonperforming:


	Accruing
(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Nonperforming (b)		Total
March 31, 2023
Commercial	$	136,619		$ 457		$ 72		$ 178		$137,326
Commercial real estate		54,544		74		5		535		55,158
Residential mortgages (a)		116,411		148		97		292		116,948
Credit card		24,952		280		256		1		25,489
Other retail		52,494		254		64		133		52,945
Total loans	$	385,020		$1,213		$494		$1,139		$387,866
December 31, 2022
Commercial	$	135,077		$350		$94		$ 169		$135,690
Commercial real estate		55,057		87		5		338		55,487
Residential mortgages (a)		115,224		201		95		325		115,845
Credit card		25,780		283		231		1		26,295
Other retail		54,382		309		66		139		54,896
Total loans	$	385,520		$1,230		$491		$ 972		$388,213

(a)

At March 31, 2023, $542 million of loans 30–89 days past due and $2.2 billion of loans 90 days or more past due purchased and that could be purchased from Government National Mortgage Association (“GNMA”) mortgage pools under delinquent loan repurchase options whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current, compared with $647 million and $2.2 billion at December 31, 2022, respectively.

(b)	Substantially all nonperforming loans at March 31, 2023 and December 31, 2022, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $4 million and $3 million for the three months ended March 31, 2023 and 2022, respectively.

summary of the Company's internal credit quality rating of loans by portfolio class

The following table provides a summary of the Company’s internal credit quality rating of loans by portfolio class and year of origination:


	March 31, 2023										December 31, 2022
			Criticized										Criticized
(Dollars in Millions)	Pass		Special Mention		Classified (a)		Total Criticized		Total		Pass		Special Mention		Classified (a)		Total Criticized		Total
Commercial
Originated in 2023		$ 14,029		$ 74		$ 135		$ 209		$ 14,238		$ —		$ —		$ —		$ —		$ —
Originated in 2022		58,723		334		433		767		59,490		61,229		245		315		560		61,789
Originated in 2021		21,541		480		254		734		22,275		26,411		159		78		237		26,648
Originated in 2020		5,226		66		123		189		5,415		7,049		68		138		206		7,255
Originated in 2019		2,859		26		203		229		3,088		3,962		51		210		261		4,223
Originated prior to 2019		5,201		44		48		92		5,293		8,986		64		129		193		9,179
Revolving (b)		26,919		147		461		608		27,527		25,888		344		364		708		26,596
Total commercial		134,498		1,171		1,657		2,828		137,326		133,525		931		1,234		2,165		135,690

Commercial real estate
Originated in 2023		2,868		131		160		291		3,159		—		—		—		—		—
Originated in 2022		15,229		261		640		901		16,130		14,527		206		519		725		15,252
Originated in 2021		12,809		358		186		544		13,353		13,565		171		99		270		13,835
Originated in 2020		5,441		49		131		180		5,621		6,489		97		117		214		6,703
Originated in 2019		6,317		220		282		502		6,819		6,991		251		304		555		7,546
Originated prior to 2019		7.959		130		566		696		8,655		9,639		138		875		1,013		10,652
Revolving		1,405		—		16		16		1,421		1,489		—		10		10		1,499
Total commercial real estate		52,028		1,149		1,981		3,130		55,158		52,700		863		1,924		2,787		55,487

Residential mortgages (c)
Originated in 2023		2,581		—		—		—		2,581		—		—		—		—		—
Originated in 2022		29,297		—		6		6		29,303		28,452		—		—		—		28,452
Originated in 2021		37,494		—		10		10		37,504		39,527		—		7		7		39,534
Originated in 2020		15,832		—		10		10		15,842		16,556		—		8		8		16,564
Originated in 2019		6,832		—		16		16		6,848		7,222		—		18		18		7,240
Originated prior to 2019		24,522		—		348		348		24,870		23,658		—		397		397		24,055
Total residential mortgages		116,558		—		390		390		116,948		115,415		—		430		430		115,845

Credit card (d)		25,232		—		257		257		25,489		26,063		—		232		232		26,295

Other retail
Originated in 2023		1,958		—		—		—		1,958		—		—		—		—		—
Originated in 2022		8,903		—		6		6		8,909		9,563		—		6		6		9,569
Originated in 2021		14,208		—		12		12		14,220		15,352		—		12		12		15,364
Originated in 2020		7,083		—		10		10		7,093		7,828		—		11		11		7,839
Originated in 2019		2,886		—		10		10		2,896		3,418		—		13		13		3,431
Originated prior to 2019		3,063		—		18		18		3,081		3,689		—		31		31		3,720
Revolving		13,846		—		99		99		13,945		14,029		—		98		98		14,127
Revolving converted to term		788		—		55		55		843		800		—		46		46		846
Total other retail		52,735		—		210		210		52,945		54,679		—		217		217		54,896
Total loans		$381,051		$2,320		$4,495		$6,815		$387,866		$382,382		$ 1,794		$4,037		$5,831		$388,213
Total outstanding commitments		$778,269		$3,209		$6,240		$9,449		$787,718		$772,804		$ 2,825		$5,041		$7,866		$780,670

Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended.

(a)	Classified rating on consumer loans primarily based on delinquency status.

(b)	Includes an immaterial amount of revolving converted to term loans.

(c)

At March 31, 2023, $2.2 billion of GNMA loans 90 days or more past due and $268

million of modified GNMA loans whose repayments are

insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, compared with $2.2 billion and $1.0 billion at December 31, 2022, respectively.

(d)	Predominately all credit card loans are considered revolving loans. Includes an immaterial amount of revolving converted to term loans.

Loans modified by class and modification type

The following table provides a summary of loan balances at March 31, 2023, which were modified during the three months ended March 31, 2023, by portfolio class and modification granted:


(Dollars in Millions)	Interest Rate Reduction		Payment Delay		Term Extension		Multiple Modifications (a)		Total Modifications		Percent of Class Total
Commercial	$	114	$	—	$	68	$	—	$	182		.1	%
Commercial real estate		—		—		12		28		40		.1
Residential mortgages (b)		—		130		10		12		152		.1
Credit card		94		—		—		—		94		.4
Other retail		2		11		63		2		78		.1
Total loans, excluding loans purchased from GNMA mortgage pools		210		141		153		42		546		.1
Loans purchased from GNMA mortgage pools (b)		—		243		63		47		353		.3

Total loans	$	210	$	384	$	216	$	89	$	899		.2	%

(a)	Includes $52 million of total loans receiving a payment delay and term extension, $32 million of total loans receiving an interest rate reduction and term extension and $5 million of total loans receiving an interest rate reduction, payment delay and term extension.

(b)	Percent of class total amounts expressed as a percent of total residential mortgage loan balances.

Effects of Loan Modifications Made During the Period

The following table summarizes the effects of loan modifications made to borrowers on loans modified during the three months ended March 31, 2023:


(Dollars in Millions)	Weighted-Average Interest Rate Reduction			Weighted-Average Months of Term Extension

Commercial		2.4	%		5
Commercial real estate		5.0			6
Residential mortgages		1.2			120
Credit card		16.0			—
Other retail		6.6			151
Loans purchased from GNMA mortgage pools		.7			66

Note: The weighted-average payment deferral for all portfolio classes was less than $1 million.

Forbearance payments are required to be paid at the end of the original term loan.

Loans Modified by Class and Delinquency Status

Loans that receive a forbearance plan generally remain in default until they are no longer delinquent as the result of the payment of all past due amounts

or the borrower receiving a term extension or modification. Therefore, loans only receiving forbearance plans are not included in the table below.

The following table provides a summary of loan balances at March 31, 2023, which were modified during the three months ended March 31, 2023, by portfolio class and delinquency status:


(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Total
Commercial	$	146	$	6	$	30	$	182
Commercial real estate		6		—		34		40
Residential mortgages (a)		319		3		10		332
Credit card		56		28		10		94
Other retail		64		3		2		69

Total loans	$	591	$	40	$	86	$	717

(a)

At March 31, 2023, $32 million of loans 30-89 days past due and $1

llion of loans 90 days or more past due purchased and that could be purchased from GNMA mortgage pools under delinquent loan repurchase options whose payments are insured by the Federal Housing administration or guaranteed by the United States Department of Veterans Affairs, were classified as current.

Summary of Loans Modified as TDRs

The following table provides a summary of loans modified as troubled debt restructurings for the period presented by portfolio class:


Three Months Ended March 31, 2022 (Dollars in Millions)	Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance
Commercial		509	$	38	$	32
Commercial real estate		9		11		10
Residential mortgages		840		228		226
Credit card		9,339		50		50
Other retail		728		37		37
Total loans, excluding loans purchased from GNMA mortgage pools		11,425		364		355
Loans purchased from GNMA mortgage pools		390		55		55

Total loans		11,815	$	419	$	410

Summary of Loans Modified as TDRs in the Past Twelve Months that have Subsequently Defaulted

The following table provides a summary of troubled debt restructured loans that defaulted (fully or partially charged-off or became 90 days or more past due) for the period presented, that were modified as troubled debt restructurings within 12 months previous to default:


Three Months Ended March 31, 2022 (Dollars in Millions)	Number of Loans		Amount Defaulted
Commercial		214	$	3
Commercial real estate		3		1
Residential mortgages		34		3
Credit card		1,634		9
Other retail		83		1
Total loans, excluding loans purchased from GNMA mortgage pools		1,968		17
Loans purchased from GNMA mortgage pools		49		8

Total loans		2,017	$	25